Just in time for the holiday travel season, the Biden administration is taking action against airlines over canceled flights—but it needs to do much more.
The Department of Transportation is hitting six airlines with a total of $7.5 million in fines and ordering them to refund hundreds of thousands of customers for flights that never happened. Those refunds will total around $600 million. Airlines are required to refund customers when flights are canceled, but they often try to avoid issuing refunds in cash, or draw out the refund process.
"When a flight gets canceled, passengers seeking refunds should be paid back promptly," Transportation Secretary Pete Buttigieg said. "Whenever that doesn't happen, we will act to hold airlines accountable on behalf of American travelers and get passengers their money back."
"A flight cancellation is frustrating enough and you shouldn't also have to haggle or wait months to get your refund," he added.
That said, the six airlines subject to the fines and refunds are not the big U.S.-based carriers:
- Frontier – $222 million in required refunds paid and a $2.2 million penalty
- Air India – $121.5 million in required refunds paid and a $1.4 million penalty
- TAP Portugal – $126.5 million in required refunds paid and a $1.1 million penalty
- Aeromexico – $13.6 million in required refunds paid and a $900,000 penalty
- El Al – $61.9 million in required refunds paid and a $900,000 penalty
- Avianca – $76.8 million in required refunds paid and a $750,000 penalty
Over the summer, almost 2.5% of all flights were canceled, while American Airlines canceled around 4.5% of its flights. Maybe American, Delta, and United have been incredibly on the ball about refunds. Maybe this DOT action is a warning shot that Secretary Pete is coming for them if they don’t get their acts together fast.
This is an area where government regulators need to take strong action:
The DOT has proposed rules strengthening refund policies and mandating fee transparency for things like parents being seated with a small child. But obviously, more is needed.
As for holiday travel, “We’re definitely in a much better place, by the numbers, than we were this summer—cancellation rates any given travel weekend much closer to what they were before the pandemic. But I do think, as we get ready for Thanksgiving and then the winter holiday travel season, we’re not out of the woods yet,” Buttigieg recently said on NBC News, touting his efforts to urge airlines to “make sure that their schedules are realistic,” and increase staffing and pilot pay.
“There’s a lot of catching up to do in the system as it works its way through some of the profound disruptions that took place during the pandemic,” he added. “I think we’re on the right track, but there’s more to do.”